When you reach your first business failure, it is easy to feel like a failure yourself. But, most entrepreneurs would be lying if they said they never failed at a business venture after starting up their businesses. Most business owners, at one time or another, will fail at a business-related task or venture. And guess what? They live to tell about it.
A business failure does not make you a personal failure. And bouncing back from a business failure is absolutely possible, should you choose to continue your business and move it in the direction of success.
Of course, everyone will react differently to a business failure. However, there are a few steps you can follow to bring your business back to life, no matter how it affects you, your business and your personal life.
- Draw the Line Between Business and Personal
The most important thing you can do when bouncing back from a business failure is to quickly draw the line between your personal life and business life. This includes not seeing yourself as a failure because your business failed. Remind yourself that this is a business and mistakes happen, just as they do in your personal life.
Once you have that in mind, continue to separate your business and personal lives financially. If your business is struggling to make money, be careful to fund the business with your own money, as this can cause a slippery slope of trying to dig yourself out of a hole you may never be able to get out of.
Make sure you keep your business and personal accounts separate. Try to raise money by starting an online fund where investors can find you and invest in your company. Or consider a small business loan for the lowest amount you need to get yourself at least breaking even for a while. But hold back on the temptation to use your own money or credit lines to fund your business failure.
- Consider Downsizing
After a business failure, you may need to cut costs wherever possible to get your business back up, running and making money again. Unfortunately, this could include downsizing inventory, office space and even employees.
As difficult as it may be to let some employees go, you have to think about the long-term effects hanging on to them could have on your business. The larger your payroll, the less money your business has to sustain itself after a failure. Remind your employees that the decision to let them go has nothing to do with their performances, but rather, the good of the company. Let them know they will be considered for re-hire should the business bounce back in the future.
Consider quickly selling off some inventory to make extra money, do more work yourself, or even temporarily move the business to a home office to save money on overhead. Downsizing may not be ideal, but it could be a short-term solution toward investing in your long-term business goals.
- Find Some New Ideas for Your Business
It is possible that your business failure had something to do with too many ideas, not enough ideas or ideas that just did not take off like you thought they would. So, consider some alternative ideas for your business. This could be anything from a new marketing strategy to a small re-branding – something to make your business new and fresh.
If you need to, take a short break while you re-strategize your business. Define new goals, detail what you want your business to be and figure out new ways to get your business there. You may find that stepping back for a short time will allow your brain to re-think your current strategy and help you come up with alternatives.
You do not have to create a new business altogether. Instead, consider making a name change, finding ways to get your business name out in your community and learn to network with those in your business field. This way, you can build a support system that could potentially lead to new ideas and strategies that work for your business.
- Set Smaller, Short-Term Goals
One of the reasons you had a business failure could be because your business goals were too difficult to reach within the time you wanted them to. Bouncing back from a business failure related to unattainable goals is possible, though, by creating some new, smaller goals.
Instead of setting a goal for annual revenue, for example, set a weekly goal. How much do you actually have to sell to break even or to make a profit? Figure that out and then focus on how much you want to sell each week as a goal. It may seem counter-intuitive, but focusing on the smaller picture can actually get you reaching the bigger picture faster.
Additionally, creating and reaching smaller goals will make you feel successful each time they are completed. A consistent completion of goals will help you stay motivated to create and reach new goals rather than struggling to reach goals that are months or years away.
- Enlist the Help of Friends and Family
When you and your business are in a bind and you are forced to scale back on employees, consider asking close friends and family to help you. Those closest to you will be happy to provide you extra support – and extra sets of hands – to get your business back on track.
Financially, you might consider borrowing money from a close friend or relative to get your business moving again. Remember to outline specific details regarding interest and length of the loan and promise to stick to them. Or, ask a friend to co-sign on a business loan for you if you need some help with credit.
If you decide to change your business plan, lean on those closest to you who might have been in a similar position with their own businesses, or can connect you to others they know. Sometimes, a network exists where you did not know there was one. Do not be afraid to ask for help when it is needed, and you will be surprised by who is readily in your corner.
- Use Your Past Failure to Motivate Your Future
Things that happen can seem to try to break you, but sometimes, these things are the best motivators in life. After you work on getting your business back to where you want it to be, reminisce on the events that led up to your business failure. Do not use them to beat yourself up, but rather, as motivators to push your business past where you ever dreamed possible.
Keep a list of every single goal you had for your business that you have met along the way. Make sure you date each goal so you can go back and see how far you have come since you struggled with your business. Make a plan to make each goal bigger and better than the last so, when you reach each one, you will truly feel like a success.
Continue to keep the enthusiasm you had about your business when you started it even after you have had a major setback. This is still the business you fought to make into what it is today, and you should never lose sight of that dream. Constantly thinking about what went wrong and worrying about it happening again will surely damage your perception of yourself and your business.
Bouncing back from a business failure will take time, but taking these steps is worth it if you truly care about your business and want to see it succeed. Enlist the help of others, make realistic goals and never let the past of your business be an indicator of its future. What other ideas do you have to bounce back from a business failure? Feel free to share your comments and questions with me.